Government support must now focus on businesses still directly impacted by border restrictions at Alert Level 1, says Tourism Industry Aotearoa. While welcoming the country’s move to Level 1 TIA Chief Executive Chris Roberts said returning to normal was still a long journey.
“With most domestic business activity possible, the move to Level 1 will be a great relief to many, but for tourism businesses, a return to normal is still a long way off. Many tourism operators and their staff will need ongoing and well-targeted support while the border restrictions remain in place.”
“Estimated tourism spend in April was down 90% at $240 million, compared with $2.5 billion in April 2019. With a drop of well over $2 billion, this is the equivalent of having lost in one month the annual value of the kiwifruit or the seafood industry.”
New Zealand’s borders are likely to remain closed to many parts of the world for the remainder of 2020, with a return to anything like the previous level of international tourism predicted to take three-to five years.
Mr Roberts says the industry is keenly awaiting further announcements on the trans-Tasman bubble, with Australia being New Zealand’s largest market for international visitors.
The Government’s Strategic Tourism Assets Protection Programme offers support for some larger businesses, while the extension of the Small Business Cashflow Scheme is useful for smaller operators.
However, Mr Roberts says industry members are hoping for a further extension of the wage subsidy.
“Helping our tourism operators to retain essential staff for the purpose of securing future revenue means we will be ready to welcome visitors from different markets as they open up again.”
Mr Roberts says the impact on communities from losing tourism businesses and jobs is immense, especially in many smaller towns with a large reliance on the visitor economy.
“The road to recovery is going to be a long one. Tourism, along with other sectors of the economy impacted by the closed border, is going to need ongoing government assistance.”
Reclaim normality
Addressing the announcement to move to Level 1 Hospitality New Zealand Chief Executive, Julie White, said it means that many hospitality operators can now begin to reclaim a sense of normality and that it will provide customers the much-needed confidence to go out and safely socialise (and spend) again.
“The news of no active COVID-19 cases is a significant achievement that our team of five million should all be proud of. The hospitality sector has also shown incredible resilience throughout this difficult time banding together to ensure that the health and safety of our communities remains paramount.
“We’ve been forced to adapt to different ways of operating as each level has decreased, and the restrictions that hospitality operators (and their customers) have had to wrestle with have been incredibly challenging – so, we’re very excited to be getting back to business.”
Hospitality New Zealand expects that with restrictions such as social distancing and table service restraints lifted, businesses in the hospitality and accommodation sectors will start to recover and slowly return, over time, to profitability.
While some accommodation providers and leisure hotspots saw a return to normal visitor and occupancy levels over Queen’s Birthday weekend, the following day’s return saw a huge dip – with a mere five percent occupancy rate in the accommodation sector, demonstrating the long road ahead to recovery.
The full year forecast predicts a 30% occupancy (at best) for accommodation and hotel providers. Similarly, the challenges of COVID-19 have also led to a 30% reduction in employment across the hospitality sector.
Prime Minister, Jacinda Ardern is expected to make more tourism and hospitality related announcements today on her visit to Kaikoura.
